You are no doubt acquainted with last week’s buzz on the launch of the Proton Preve and Exora into the Australian market. Of course, any news on Proton is often the source of much talk, debate and speculation – but this could be among the most significant yet.
Not only does this mark the first export of Proton’s newest model, it is also a rebirth of sorts – after a dry spell Down Under that lasted several years in which no new models were introduced, new owner DRB-Hicom is aiming to change public perception in this market and turn things around for our national carmaker, particularly with regards to increasing – and maintaining – profitability.
The management team duly shared with us how it plans to go about this in a press conference held just after the launch ceremony last Wednesday.
Why Australia as the Preve’s first international destination? “We think that in Australia, the demand for mid-size sedan cars like this is very popular,” said Proton executive chairman Datuk Seri Mohd Khamil Jamil. He added that with the advanced features and technology employed in the Preve, the Malaysian mid-sizer will give similar offerings from Korean and Chinese carmakers “a run for their money” in the hotly-contested segment.
Proton operates in Australia through a network of 34 dealers. They started off on a good footing, but sales in recent years have been slow, owing somewhat to the global financial downturn, but mostly due to the fact that there hasn’t been new offerings in the Australian range for some time.
Several dealers have pulled out because of the unfulfilled promise regarding the arrival of new models. Currently, the S16 (the Saga FLX) makes up 70% of sales in the country.
Nevertheless, Mohd Khamil is confident that he and his team can revive the brand with the Preve and Exora, which have been designed to comply with Australasian New Car Assessment Program (ANCAP) safety standards, incorporating HPF (Hot Press Forming) and TWB (Tailor Welded Blank) processes in their body construction to this effect. Proton is in fact the first carmaker in the ASEAN region to use HPF.
In addition to that, the ‘five-star’ package comprising a five-year warranty, five-year roadside assistance and five-year free service attempts to build back confidence in dealers and consumers. Indeed, Proton is the only carmaker in Australia to provide such a package.
“In terms of projection we are looking at about 200 to 240 cars a month,” says Mohd Khamil Jamil, referring to the Australian market, adding that the company targets annual sales of 2,000 to 3,000 units for the first year, and 4,000 a year after that.
“Looking into the history of Proton, it’s going to be difficult to reach those targets,” he admits. However, he is keen to point out that the main priority lies in making a profit, not just outright sales. “It’s no point of us doing good numbers but losing money at the end of it. At the end of the day, it’s the top and bottom line that matters very much to the company.
“It’s not just about selling cars, it’s about maintaining your name and your brand. We’re going to focus our export programme through a more concerted plan.”
With regards to spec differences between the Aussie cars and ours, deputy CEO Datuk Lukman Ibrahim has an answer. “It’s a different selling point. When we look at different markets, we have to design to the highest requirement, which results in extra specs that will in return benefit developing markets (like Malaysia).”
Because of stringent safety standards in Australia, it is difficult to sell a car there without ESC, for instance. “With that offering (in Malaysia) you can start at a higher price point, and that can help Proton have a better margin, rather than exporting and end up losing.”
“In layman terms, it is cheaper for us to cost down than cost up,” Mohd Khamil chips in. “If we cost up (for developed markets), the small volume will not justify the high expense.” In the future, he says, we can expect Protons to be benchmarked to the highest export market requirements, and have more commonisation between markets.
As for the ‘five-star’ package, we were told that should be emulated in Malaysia, subject to study and review, that is. “It is in the plan, but we have to consider the logistics. The numbers here (in Australia) go into thousands, say 2,000, but the numbers in Malaysia run into over 100,000. If the figures are right, we would introduce (the package) to Malaysia.”
The executive chairman also pushed aside rumours of the halting of R&D during the acquisition of Proton early this year. “There has never been any practice, and I have never given any instruction, to stop development. That would retard the growth of the company.”
So what’s next? Well, the next immediate destination will be neighbouring New Zealand, and a revival in the same vein is expected to happen in the UK, Indonesia and Thailand in the future, with possibly China joining the list too.
Upcoming models are a hatchback version of the Preve within the next 10 months, a revival of the Satria Neo for the Aussie market (playing on its rallying success, especially in the Asia Pacific Rally Championship) and of course the electric and global small car expected in 2014.
With the new management steadfast in their beliefs and vision, it certainly seems that interesting times are ahead for Proton. We await with bated breath for further announcements regarding its plans later this year.